S&P affirms Play on tap issue news

Standard & Poor’s said it affirmed the B long-term corporate credit rating on Play Holdings 2 Sarl.

The agency also said it affirmed the B rating on Play’s senior secured notes, including the proposed €125 million tap issuance.

The affirmation follows Play’s plans to issue €125 million of senior secured notes through a tap on the existing notes.

Play is expected to use the proceeds to provide additional funding for purchase of additional LTE (long-term evolution) spectrum in the ongoing 800MHz/2,600n MHz spectrum auction, S&P said.

The additional debt would add about 0.5x to Play’s leverage based on its 2014 adjusted EBITDA, the agency said.

But, S&P said this will be more than offset by continued growth in Play’s revenues and margins, supporting de-leveraging in 2015 to about 5x.

This expectation assumes that Play will fully fund the upcoming spectrum license acquisition with cash, the proposed issuance and cash-flow generation with the possible temporary use of the undrawn revolving credit facility to bridge timing-related gaps, the agency said.

Play’s financial risk profile remains constrained by its aggressive financial policy and the risk that its shareholders will continue to take advantage of performance-related growth to make further shareholder-friendly distributions, S&P said.

Play also continues to be exposed to potential foreign-exchange volatility arising from the company’s nearly 100% exposure to the Polish zloty, the agency added.

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